A Summary Of Obamacare And What It Means For The Future

Obama Talkin Obamacare 600x300 A Summary Of Obamacare And What It Means For The Future

Today I stumbled across just about the best breakdown of the Obamacare bill one could hope to find. Reddit user CaspianX2 has written out a piece by piece analysis of the future of healthcare in the U.S.

If you’re interested in further reading, I believe he answers some questions in the thread. There is also a newer video explanation of what the new law really means for you today.

As with any analysis, it is not without bias, but the author does an excellent job of getting the points across.

Okay, explained like you’re a five year-old (well, okay, maybe a bit older), without too much oversimplification, and (hopefully) without sounding too biased:

What people call “Obamacare” is actually the Patient Protection and Affordable Care Act. However, people were calling it “Obamacare” before everyone even hammered out what it would be. It’s a term mostly used by people who don’t like the PPACA, and it’s become popularized in part because PPACA is a really long and awkward name, even when you turn it into an acronym like that.

Anyway, the PPACA made a bunch of new rules regarding health care, with the purpose of making health care more affordable for everyone. Opponents of the PPACA, on the other hand, feel that the rules it makes take away too many freedoms and force people (both individuals and businesses) to do things they shouldn’t have to.

So what does it do? Well, here is everything, in the order of when it goes into effect (because some of it happens later than other parts of it):

(Note: Page numbers listed in citations are the page numbers within the actual document, not the page numbers of the PDF file)

Already in effect:

1/1/2013

  • If you make over $200,000 a year, your taxes go up a tiny bit (0.9%). Edit: To address those who take issue with the word “tiny”, a change of 0.9% is relatively tiny. Any look at how taxes have fluctuated over the years will reveal that a change of less than one percent is miniscule, especially when we’re talking about people in the top 5% of earners. ( Citation: Page 818, sec. 9015 )

1/1/2014

This is when a lot of the really big changes happen.

  • No more “pre-existing conditions”. At all. People will be charged the same regardless of their medical history. ( Citation: Page 45, sec. 2704, Page 46, sec. 2701, and Page 57, sec. 1255 )
  • If you can afford insurance but do not get it, you will be charged a fee. This is the “mandate” that people are talking about. Basically, it’s a trade-off for the “pre-existing conditions” bit, saying that since insurers now have to cover you regardless of what you have, you can’t just wait to buy insurance until you get sick. Otherwise no one would buy insurance until they needed it. You can opt not to get insurance, but you’ll have to pay the fee instead, unless of course you’re not buying insurance because you just can’t afford it. (Note: On 6/28/12, the Supreme Court ruled that this is Constitutional, as long as it’s considered a tax on the uninsured and not a penalty for not buying insurance… nitpicking about wording, mostly, but the long and short of it is, it looks like this is accepted by the courts) ( Citation: Page 145, sec. 5000A, and here is the actual court ruling for those who wish to read it. )

Question: What determines whether or not I can afford the mandate? Will I be forced to pay for insurance I can’t afford?

Answer: There are all kinds of checks in place to keep you from getting screwed. Kaiser actually has a webpage with a pretty good rundown on it, if you’re worried about it. You can see it here.

Okay, have we got that settled? Okay, moving on…

  • Medicaid can now be used by everyone up to 133% of the poverty line (basically, a lot more poor people can get insurance) ( Citation: Page 179, sec. 2001 )
  • Small businesses get some tax credits for two years. (It looks like this is specifically for businesses with 25 or fewer employees) ( Citation: Page 138, sec. 1421 )
  • Businesses with over 50 employees must offer health insurance to full-time employees, or pay a penalty.
  • Insurers now can’t do annual spending caps. Their customers can get as much health care in a given year as they need. ( Citation: Page 14, sec. 2711 )
  • Limits how high of an annual deductible insurers can charge customers. ( Citation: Page 62, sec. 1302 )
  • Cut some Medicare spending
  • Place a $2500 limit on tax-free spending on FSAs (accounts for medical spending). Basically, people using these accounts now have to pay taxes on any money over $2500 they put into them. ( Citation: Page 801, sec. 9005 )
  • Establish health insurance exchanges and rebates for the lower and middle-class, basically making it so they have an easier time getting affordable medical coverage. ( Citation: Page 88, sec. 1311 )
  • Congress and Congressional staff will only be offered the same insurance offered to people in the insurance exchanges, rather than Federal Insurance. Basically, we won’t be footing their health care bills any more than any other American citizen. ( Citation: Page 81, sec. 1312 )
  • A new tax on pharmaceutical companies.
  • A new tax on the purchase of medical devices.
  • A new tax on insurance companies based on their market share. Basically, the more of the market they control, the more they’ll get taxed.
  • The amount you can deduct from your taxes for medical expenses increases.

1/1/2015

  • Doctors’ pay will be determined by the quality of their care, not how many people they treat. Edit: a_real_MD addresses questions regarding this one in far more detail and with far more expertise than I can offer in this post. If you’re looking for a more in-depth explanation of this one (as many of you are), I highly recommend you give his post a read.

1/1/2017

  • If any state can come up with their own plan, one which gives citizens the same level of care at the same price as the PPACA, they can ask the Secretary of Health and Human Resources for permission to do their plan instead of the PPACA. So if they can get the same results without, say, the mandate, they can be allowed to do so. Vermont, for example, has expressed a desire to just go straight to single-payer (in simple terms, everyone is covered, and medical expenses are paid by taxpayers). ( Citation: Page 98, sec. 1332 )

2018

  • All health care plans must now cover preventive care (not just the new ones).
  • A new tax on “Cadillac” health care plans (more expensive plans for rich people who want fancier coverage).

2020

  • The elimination of the “Medicare gap”.

Aaaaand that’s it right there.

The biggest thing opponents of the bill have against it is the mandate. They claim that it forces people to buy insurance, and forcing people to buy something is unconstitutional. Personally, I take the opposite view, as it’s not telling people to buy a specific thing, just to have a specific type of thing, just like a part of the money we pay in taxes pays for the police and firemen who protect us, this would have us paying to ensure doctors can treat us for illness and injury.

Plus, as previously mentioned, it’s necessary if you’re doing away with “pre-existing conditions” because otherwise no one would get insurance until they needed to use it, which defeats the purpose of insurance.

Of course, because so many people are arguing about it, and some of the people arguing about it don’t really care whether or not what they’re saying is true, there are a lot of things people think the bill does that just aren’t true. Here’s a few of them:

Obamacare has death panels!: That sounds so cartoonishly evil it must be true, right? Well, no. No part of the bill says anything about appointing people to decide whether or not someone dies. The decision over whether or not your claim is approved is still in the hands of your insurer. However, now there’s an appeals process so if your claim gets turned down, you can challenge that. And the government watches that appeals process to make sure it’s not being unfair to customers. So if anything the PPACA is trying to stop the death panels. ( Citation: Page 23, sec. 2719 )

What about the Independent Medical Advisory Board? Death Panels!: The Independent Medical Advisory Board is intended to give recommendations on how to save Medicare costs per person, deliver more efficient and effective care, improve access to services, and eliminate waste. However, they have no real power. They put together a recommendation to put before Congress, and Congress votes on it, and the President has power to veto it. What’s more, they are specifically told that their recommendation will not ration health care, raise premiums or co-pays, restrict benefits, or restrict eligibility. In other words, they need to find ways to save money without reducing care for patients. So no death panels. In any sense of the (stupid) term. ( Citation: Page 407, sec. 3403 )

Obamacare gives free insurance to illegal immigrants!: Actually, there are multiple parts of the bill that specifically state that the recipient of tax credits and other good stuff must be a legal resident of the United States. And while the bill doesn’t specifically forbid illegals from buying insurance or getting treated at hospitals, neither did the laws in the US before the PPACA. So even at worst, illegals still have just as much trouble getting medical care as they used to. ( Citations: Page 122, sec. 1402, Page 123, sec. 1411, Page 125, sec. 1411, Page 132, sec. 1412 )

Obamacare uses taxpayer money for abortions!: One part of the bill says, essentially, that the folks who wrote this bill aren’t touching that issue with a ten foot pole. It basically passes the buck on to the states, who can choose to allow insurance plans that cover abortions, or they can choose to not allow them. Obama may be pro-choice, but that is not reflected in the PPACA. ( Citation: Page 64, sec. 1303 )

Obamacare won’t let me keep the insurance I have!: The PPACA actually very specifically says you can keep the insurance you have if you want. ( Citation: Page 55, sec. 1251 )

Obamacare will make the government get between me and my doctor!: The PPACA very specifically says that the Secretary of Health and Human Services (who is in charge of much of the bill), is absolutely not to promote any regulation that hinders a patient’s ability to get health care, to speak with their doctor, or have access to a full range of treatment options. ( Citation: Page 165, sec. 1554 )

Obamacare has a public option! That makes it bad!: The public option (which would give people the option of getting insurance from a government-run insurer, thus the name), whether you like it or not, was taken out of the bill before it was passed. You can still see where it used to be, though. ( Citation: Page 92, sec. 1323 (the first one))

Obamacare will cost trillions and put us in massive debt!: The PPACA will cost a lot of money… at first. $1.7 Trillion. Yikes, right? But that’s just to get the ball rolling. You see, amongst the things built into the bill are new taxes – on insurers, pharmaceutical companies, tanning salons, and a slight increase in taxes on people who make over $200K (an increase of less than 1%). Additionally, the bill cuts some stuff from Medicare that’s not really working, and generally tries to make everything work more efficiently. Also, the increased focus on preventative care (making sure people don’t get sick in the first place), should help to save money the government already spends on emergency care for these same people. Basically, by catching illnesses early, we’re not spending as much on emergency room visits. According to the Congressional Budget Office, who studies these things, the ultimate result is that this bill will reduce the yearly deficit by $210 billion. By the year 2021, the bill will actually have paid itself and started bringing in more money than it cost.

Obamacare is twice as long as War and Peace!: War and Peace is 587,287 words long. The Patient Protection and Affordable Care Act, depending on which version you’re referring to, is between 300,000-400,000 words long. Don’t get me wrong, it’s still very long, but it’s not as long as War and Peace. Also, it bears mention that bills are often long. In 2005, Republicans passed the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, 2005, which was almost as long as the PPACA, and no one raised a stink about it.

The people who passed Obamacare didn’t even read it!: Are you kidding? They had been reading it over and over for a half a year. This thing was being tossed around in debates for ages. And it went through numerous revisions, but every time it was revised, it was just adding, removing, or changing small parts of it, not rewriting the whole thing. And every time it was revised, the new version of the bill was published online for everyone to see. The final time it was edited, there may not have been time to re-read the entire thing before voting on it, but there wasn’t a need to, because everyone had already read it all. The only thing people needed to read was the revision, which there was plenty of time to do.

Pelosi said something like, “we’ll have to pass the bill before reading it”!: The actual quote is “we have to pass the bill so that you can find out what is in it, away from the fog of controversy”, and she’s talking about all the lies and false rumors that were spreading about it. Things had gotten so absurd that by this point many had given up on trying to have an honest dialogue about it, since people kept worrying about things that had no basis in reality. Pelosi was simply trying to say that once the bill is finalized and passed, then everyone can look at it and see, without question, what is actually in the thing (as opposed to some new amendment you heard on the radio that they were going to put in).

I think those are some of the bigger ones.

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  • Jared

    Healthcare is so expensive because it is over-regulated and subsidized by government. Same reasons that education costs are artificially high. It amazes me how proponents of Obamacare think it will make healthcare cheaper. I mean seriously….900+ pages of new rules and you think it will make healthcare more affordable? What they really mean is that healthcare will be more affordable for some people, while everybody else has to pick up the tab. A lot of these regulations might sound great, but there are costs associated with compliance. These costs will be passed down to consumers in the form of higher premiums and other measures. Progressives are so stupid to believe that businesses will just sit back and “eat” losses that result from government mandates.

    It’s kind of like how the Feds got involved in the debit/credit card industry with the Durbin legislation. They thought by capping interchange rates that card issuing banks and the card brands could charge merchants for payments made with debit cards, it would lower the costs of doing business for merchants and thus result in lower prices for consumers and free up cash to provide new jobs. But did that happen? No. The only thing that did was let the merchants make a higher margin. How naive liberals are to think that the merchants would say “Hey, we’ve got all this extra money now, which means we can lower our prices and hire more people!”. What really happened is the owners/managers/major stockholders can just buy more expensive cars and houses. Have you seen any noticable price drops at any supermarket or retail chain since Durbin went into effect in October?

    Let me give you an example. It’s going to be a bit long-winded, but it’s necessary for some people to understand why government interference in the market almost always makes things worse. Suppose you go to the store and pay for $150 in groceries with your debit card. Before Durbin, that transaction would probably cost the merchant about 0.8% of the $150, plus a flat $0.15. So to allow you to pay with your debit card, the merchant paid a VISA “interchange” rate of $1.35.

    Assuming your debit card is with a regulated bank, which is any bank having more than a certain dollar value of annual assets, the regulated rate is capped at 0.05% + $0.22. So the grocery store’s cost on your debit card payment was reduced to $0.23. That is an 83% savings from before the regulation. Now then, it is pretty standard that debit cards account for between 75% and 80% of electronic card transactions, with roughly half of those falling under the new regulations. Thus, you know for certain that supermarket and retail chains that were taking credit cards were beneficiaries of DRASTICALLY lower costs. But did prices go down? No, they didn’t. Did we see a spike in new jobs added with all the extra profits these businesses were raking in? Nope.

    Enter VISA in April of 2012. Of course the windfall profits experienced by merchants thanks to Durbin were at the direct expense of VISA and their partner card issuing banks. VISA sends out a new update to their interchange rates and fees every spring and fall. This spring, VISA came up with a bunch of rate increases and NEW fees to recover their losses from Durbin. The new rates and fees especially punish high volume merchants, but even beyond that a majority of merchants are now seeing interchange costs in excess of what they were before Durbin. The party is over for merchants now, so what do you think is going to happen? Merchants will raise the prices of their goods and services to compensate. The cost has now shifted to where it always goes when government meddles in private industry…..to the consumer. At best, Durbin is a zero-sum game and at worst it made goods and services more expensive for nearly everyone.

    Rinse and repeat this process for healthcare, or any other industry where the government swoops in to “reform” and “fix” the perceived injustices and problems in the free market.

    • Nick

      Wow. Thanks for the comments!

  • Jared

    Correction above, the Durbin cost on the debit card transaction would be $0.30, not $0.23. That means a cost savings of about 78%. Obviously that doesn’t hurt my point at all, however.

  • http://www.facebook.com/profile.php?id=1633463276 Jeff Maish Mundu

    this thing of obama care is not straight,it seams that some powers of darkness are misleading obama to his downfall.and to mess up america.

    • Jesse

      you misspelled “seems”… But you sound like a smart guy hahaha

  • Sal Gleason

    Two years after graduating, Obama was hired in Chicago as director of the Developing Communities Project (DCP), a church-based community organization originally comprising eight Catholic parishes in Roseland, West Pullman, and Riverdale on Chicago’s South Side. He worked there as a community organizer from June 1985 to May 1988.-

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  • Dave

    I think this is probably the clearest and best written summary of “Obamacare” I’ve seen yet, with plentiful citations! I’ve been saying for some time that Obamacare seemed to have a lot of potential, but I wasn’t sure about its fairness and was skeptical of its execution. Now I am more certain about its potential, a bit more reassured about its fairness, and hopeful, though still skeptical about whether or not a country so divided as America can execute this plan successfully.

  • Lee

    Ok, Obamacare may be a noble program as written, however, a multitude of waivers have already eliminated several of the noble provisions of the bill. Most people know, as is the case with most government programs, that special interest groups will continue to chip away at the bill until it is gutted leaving an expensive welfare mess. You were so naive to believe this bill would actually be implemented the way it was written.

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